REFILE-UPDATE 1-Lundbeck hikes profit outlook, eyes return to growth in 2020

COPENHAGEN (Reuters) – Danish drugmaker Lundbeck (LUN.CO) raised its outlook for full-year sales and profit on Tuesday following better-than-expected third quarter sales of key drugs and said it expected to return to growth next year, driving its shares over 5% up. Lundbeck, which specializes in treatments for illnesses such as Alzheimer’s and depression, has struggled with patent expirations on existing drugs, which has dampened sales this year. But improved sales of newer, key drugs such as anti-depressant treatment Brintellix, mean the company now expects annual revenue to range from 16.7 billion to 16.9 billion Danish crowns ($2.52 billion), up from an estimated 16.3 billion to 16.7 billion. It expects annual earnings before interest and tax (EBIT) to land in a 3.4 to 3.7 billion range, up from a previous 3.2 to 3.6 billion. Lundbeck’s sales dropped 9.4% in the first nine months due to expected tough competition from generic products on epilepsy drug Onfi, previously its biggest brand, whose patent expired in October last year. Onfi now represents less than 7% of total revenue, down from 18% at the beginning of the year. “We expected Onfi’s decline to really affect us in 2019, but be mostly washed through by 2020,” Chief Executive Deborah Dunsire told Reuters. “So our North American market returns to growth in 2020 and overall Lundbeck returns to revenue growth in 2020 because of that,” Dunsire added. Lundbeck shares were last up 5.4%. Having already announced two acquisitions this year, Lundbeck has said it will buy drugs in late-stage clinical trials or products that are ready for the market as a means to boost sales. In September Lundbeck bought biotech Alder BioPharmaceuticals in a $2 billion deal, entering a growing migraine treatment market which could reach annual sales of $8.7 billion in 2026, according to GlobalData analytics firm. Lundbeck is now in “investment mode”, Dunsire said, preparing for the launch of migraine prevention drug eptinezumab in the United States and to seek regulatory approval for the drug in the European Union, China and Japan. This means next year would be impacted by additional operating expenses of 2 billion crowns, Lundbeck said. Jefferies said in an analyst note “commercial challenges” could lie in wait for eptinezumab’s U.S. launch since it “could be difficult to differentiate against big pharma muscle”. Eptinezumab, administered intravenously, would fight for market share with three subcutaneous migraine treatments by Lundbeck rivals Eli Lilly (LLY.N), Amgen/Novartis (NOVN.S) and Teva (TEVA.TA). (This story fixes typo in spelling of Amgen in last paragraph)

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